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SC rejects Gammon plea for duty exemption on machine imports

Press Trust of India / New Delhi 10 Jul 11 | 12:30 PM

The Supreme Court has rejected construction major Gammon India's petition challenging the government decision to impose custom duty on the machines it imported from Germany.

A bench of Justice D K Jain and Justice H L Dattu dismissed Gammon's plea and said the company was not entitled to customs duty exemption on import of concrete batching plant from Germany.

Earlier, the Custom Excise and Service Tax Appellate Tribunal had also rejected Gammon's plea and held that it would have to pay the custom duty.

"The decision of the Tribunal holding that the appellant was not entitled to the benefit of Exemption notification cannot be flawed... The appeal being bereft of any merit is dismissed accordingly, with costs quantified at Rs 50,000," the apex court said.

Gammon had imported the plant for constructing road on National Highway 5. The company had claimed before the custom authority that as per notification of March 2001, it was exempted from paying duty on imported machinery because it was for the construction of roads.

However, the custom department rejected its argument on the ground that the condition of the exemption was available only if the goods were imported by "a person who has been awarded the contract" by NHAI for construction of roads in India by or on behalf of Ministry of Surface Transport.
    
They said that in Gammon's case the goods have been imported by a company to whom no contract had been awarded by the authorities specified in the notification.
    
The project was awarded to a joint venture firm Gammon Atlanta, which is a partnership between - Gammon and Atlanta.
    
The dispute went to CESTAT, which said that it was not entitled to claim the benefit of Exemption Notification issued by the Ministry of Finance on March 1, 2001, as it was imported by a Joint Venture firm Gammon Atlanta JV.
    
The tribunal had further said that "the department has been justified in rejecting it on the ground that the identity of the real importer was not known."

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